A Royal Scandal

A Royal Scandal

November 15, 2001

The presence of US troops on Saudi Arabia's holy sand seems to have truly enraged fanatics and spurred Osama bin Laden to his atrocities, but another sore point with many Saudis has received far less attention: the obscene, almost comical corruption involving the arms trade and the royal family. Currently the top importer of weapons in the world, Saudi Arabia spends 40 percent of its import dollars on weapons, including $40 billion worth bought from the United States in the past twelve years. "Huge military contracts are burning the money," explains London-based Saad al-Fagih of the Movement for Islamic Reform in Arabia, a moderate Saudi dissident organization. "That is an important reason of resentment by the people against the regime."

Research support provided by the Investigative Fund of the Nation Institute.

Adding to the outrage, it's an open secret that Saudi Arabia nonetheless "remains unable to defend itself," as the Federation of American Scientists puts it. In the scenarios batted around in Washington, the kingdom's chief potential enemies are Iran, whose military expenditures are about a quarter of Saudi Arabia's, and Iraq, which spends even less. "We don't have the capability of defeating Iran or Iraq," one Saudi acknowledges. "We rely on the United States. That's the philosophy."

The US philosophy is to guarantee the kingdom's safety while also making sure the Saudis buy the best of everything, at top dollar. Saudi arms purchases are so vital to the US economy that they have even played a role in politics. During the 1992 presidential campaign, for example, first Bill Clinton and then later Bush I appeared at rallies at the McDonnell Douglas plant to support the sale of F-15s to the Saudis. The deal had been heavily promoted in a "jobs now" campaign.

Concerns about massive corruption behind many deals have dissidents stewing. They say it spurs the ruling family to buy unnecessary military equipment at inflated prices. "They see this conspiracy of looting the country of its resources with these military contracts," says al-Fagih, "to suck the cash from the country." Corruption, he alleges, starts at the top, with Defense Minister Prince Sultan. "What happens is everybody is on the take," says one former US official who worked on a contract with the Saudi Defense Ministry after his retirement. To do business in the country, a company needs an agent. "Everything," says the former official, "depends on who is the prince behind the agent." Key princes all have their spheres of influence. Mohammed Al-Khilewi, a Saudi diplomat who defected to an embarrassed United States in 1994, told Middle East Quarterly in 1998: "The Saudis are brazen about taking commissions and breaking American law. Examine closely the terms of agreement and you will see that the costs are always at least twice the fair market price." In reality, that's not necessarily the case, but it's easy to get that impression from the confusing mathematics of weapons deals. Take that $9 billion deal for seventy-two F-15 fighters. The cost averages out to $125 million per plane, compared with the initial price tag of $34 million per plane. The extra $90 million per plane was for hundreds of missiles and hours of training, spare parts and maintenance.

All the gear the Saudis buy requires constant maintenance and upgrading. Saudi Arabia is not a developed country with a skilled work force, so, as Jane's Defense Weekly has reported, there is an almost total reliance on expatriate personnel. The number of foreign contract workers in Saudi Arabia's military is estimated to be 14,000, roughly equal to the manpower of the entire Saudi Royal Navy.

In a country with a 30 percent unemployment rate, there's no question that these civilian advisers and trainers are a focal point of the Islamists' outrage. When terrorists struck in Riyadh in 1995, the target was the US headquarters of a program to train the Saudi Arabian National Guard. Four of the five American victims were civilians on contract.